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Corruption costs developing countries $40bn annually

Corruption costs developing countries $40bn annually
By Laura Mushaukwa
Sunday September 23, 2007 [04:00]

BRIBES received by public officials from developing countries are estimated at between US$20 to US$40 billion annually, Transparency International chairperson Huguette Labelle has disclosed. Commenting on the recently launched Stolen Asset Recovery (StAR) Initiative of the World Bank and United Nations aimed at locating assets plundered from developing countries, Labelle explained that the money siphoned from developing countries through criminal activities can be used for proper causes such as poverty alleviation.

"Corruption's drain on resources available to alleviate poverty, disease and illiteracy is profound," Labelle said.


"The annual cross-border flow of proceeds from criminal activity, corruption and tax evasion is estimated by the StAR report at between US$1 trillion and US$1.6 trillion."
She noted that the money siphoned from developing countries was equivalent to the World Bank's total annual lending portfolio.

"Transparency International (TI) welcomes the Stolen Asset Recovery (StAR) Initiative of the World Bank and United Nations as it is an important element of the Bank's comprehensive attack on corruption," Labelle noted.

She observed that the programme, which will provide resources to help countries locate and repatriate assets lost through illicit acts, was a wake-up call to those who stole and facilitated the harbouring of stolen assets.

"Transparency International has long called for action to end safe havens for such funds and to secure their return to their rightful owners," Labelle said.
"Our national chapters around the world actively supported inclusion of strong provisions for this purpose in the UN Convention against Corruption (UNCAC) in order to ensure cooperation between developing and developed countries."

She said locating, freezing and repatriating stolen assets required cooperation among governments seeking recovery from financial institutions holding the assets and from governments that regulate institutions that provide offshore accounts.
"Realising the full potential of these legal requirements will require political will and strong support from many stakeholders," Labelle said.

"Civil society must play a key role in the implementation of StAR and that critical role must be reflected in the initiative's structure."

She suggested the need for World Bank and other donors to play a supportive role in assisting governments with the skills and resources to navigate complex procedures and legal requirements.

"They can also create transparency and accountability mechanisms to ensure that the returned funds are used to benefit the citizens," Labelle suggested.

"Countries can also sanction publicly held companies that are complicit in corruption, and promote compliance by financial centres with anti-money laundering rules."
She observed that the StAR initiative could only be effective in countries with efficient judiciaries.

"The StAR initiative is an important development, adding a powerful deterrent to those seeking to plunder their nation's wealth and to those who have willfully or inadvertently provided them safe havens," Labelle said.
"With strong top-level leadership from these institutions, from governments and from the banking and legal community, StAR can be a valuable component of the broader anti-corruption reform agenda."

She stressed the need for all countries to ratify the United Nations Convention against Corruption for an initiative such as StAR to be a success.

Labels: CORRUPTION

posted by MrK @ 4:06 AM